Delistings in NASDAQ: A Growing Trend

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Posted on June 16, 2011 at 5:06 PM

Simpson Thacher & Bartlett is advising private equity fund CDH China Growth Capital Fund II LP on it’s planned acquisition of Nasdaq-listed CNinsure Inc. This follows the recent trend of delistings from the exchange. CDH China Growth Capital Fund II LP is working with TPG Capital, a US private equity firm, together they will be offering $951 million for the CNinsure Inc. CNinsure Inc is a Chinese insurance company based in Guangzhau. CNinsure provides property, casualty and life insurance. Simpson Thacher’s team is led by partner Kathryn King Sudol. CNinsure is being advised by Latham & Watkins, the team is led by corporate partners Timothy Gardner and David Zhang. O’Melveny & Myers, led by partner Douglas Freeman, is US counsel to CNinsure’s special committee of directors. Denise Wong of Walkers Global is providing Cayman Islands law advice to the company. CNinsure raised $186 million since it first listed its American depositary shares on Nasdaq in 2007. CNinsure is just one of the Chinese Companies to delist or plan delistings from the NYSE this quarter. Recently Kirkland & Ellis advised Bain Capital in a similar deal. Bain Capital offered $266 million for the delisting from Nasdaq and purchasing of China Fire & Security Group, Inc. Cleary Gottlieb Steen & Hamilton was involved in a similar transaction, advising a consortium of buyers in a deal worth $443 million involving Funtalk China Holding Ltd, a Chinese cell phone retailer. Other Chinese companies have been also taking steps towards delisting from Nasdaq. Fushi Copperweld Inc, a Beijing wire producer, has turned to Gibson, Dunn & Crutcher for advise on a management buyout that would be backed by private equity house Abax Global Capital. Both Skadden, Arps, Slate, Meagher & Flom and Weil, Gotshal & Manges are providing counsel to the potential investors. This growing trend is continuing the need for US firms to maintain involvement in the advising and counseling of Chinese companies in and out of the US.